Amended in Senate June 17, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 115


Introduced by Assembly Member Perea

(Coauthor: Assembly Member Alejo)

January 14, 2013


An act to amend Sections 116760.50, 116760.70, 116760.79, 116760.90, and 116761.20 of the Health and Safety Code, relating to drinking water, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 115, as amended, Perea. Safe Drinking Water State Revolving Fund.

Existing law, the California Safe Drinking Water Act, requires the State Department of Public Health to administer provisions relating to the regulation of drinking water to protect public health, including, but not limited to, conducting research, studies, and demonstration programs relating to the provision of a dependable, safe supply of drinking water, enforcing the federal Safe Drinking Water Act, adopting and enforcing regulations, and conducting studies and investigations to assess the quality of water in domestic water supplies.

Existing law establishes the Safe Drinking Water State Revolving Fund, which is continuously appropriated to the department for the provision of grants and revolving fund loans to provide for the design and construction of projects for public water systems that will enable suppliers to meet safe drinking water standards. Existing law requires the department to establish criteria for projects to be eligible for the grant and loan program, including that a legal entity exist that has the authority to enter into contracts and incur debt on behalf of the community to be served and owns the public water system or has the right to operate the public water system under a lease with a term of at least 20 years, unless otherwise authorized by the department.

This bill would authorize the department to fund projects, by grant, loan, or a combination of the two, where multiple water systems apply for funding as a single applicant for the purpose of consolidating water systems or extending services to households relying on private wells, as specified. The bill would authorize funding of a project to benefit a disadvantaged community that is not the applying agency. The bill, for purposes of considering eligibility for construction funding, would require a legal entity to exist that is not necessarily the applicant, but that has the authority to enter into contracts and incur debt on behalf of at least one of the communities to be served and has the right to operate at least one of the public water systems under a lease or memorandum of understanding with a term of at least 20 years. By authorizing the use of a continuously appropriated fund for new purposes, this bill would make an appropriation.

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This bill would, if legislation is enacted in 2013 that transfers the statutory and regulatory authority for the California Safe Drinking Water Act from the Department of Public Health, delay the implementation of the provisions of the act for one year after the effective date of the transfer of authority.

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Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 116760.50 of the Health and Safety Code
2 is amended to read:

3

116760.50.  

The department shall establish criteria that shall
4be met for projects to be eligible for consideration for funding
5under this chapter. The criteria shall include all of the following:

6(a)  All preliminary design work for a defined project that will
7enable the applicant or another public water system to supply water
8that meets safe drinking water standards, including a cost estimate
9for the project, shall be completed.

10(b)  For purposes of the department considering eligibility for
11construction funding, a legal entity shall exist that has the authority
12to enter into contracts and incur debt on behalf of at least one of
13the communities to be served and owns the public water system
P3    1 or has the right to operate at least one of the public water systems
2under a lease or memorandum of understanding with a term of at
3least 20 years, unless otherwise authorized by the department. The
4applicant need not be the legal entity. If the proposed project is
5funded by a loan under this chapter, the department may require
6the applicant or other legal entity to secure a lease for the full term
7of the loan if the loan exceeds 20 years.

8(c)  The applicant shall hold all necessary water rights.

9(d)  The applicant shall have completed any review required
10pursuant to the California Environmental Quality Act (Division
1113 (commencing with Section 21000) of the Public Resources
12Code) and the guidelines adopted pursuant thereto, and have
13included plans for compliance with that act in its preliminary plans
14for the project.

15(e)  The applicant has assembled sufficient financial data to
16establish its ability to complete the proposed project and to
17establish the amount of debt financing it can undertake.

18

SEC. 2.  

Section 116760.70 of the Health and Safety Code is
19amended to read:

20

116760.70.  

(a) The department, after public notice and hearing,
21shall, from time to time, establish a priority list of proposed projects
22to be considered for funding under this chapter. In doing so, the
23department shall determine if improvement or rehabilitation of the
24public water system is necessary to provide pure, wholesome, and
25potable water in adequate quantity and at sufficient pressure for
26health, cleanliness, and other domestic purposes. The department
27shall establish criteria for placing public water systems on the
28priority list for funding that shall include criteria for priority list
29categories. Priority shall be given to projects that meet all of the
30following requirements:

31(1) Address the most serious risk to human health.

32(2) Are necessary to ensure compliance with requirements of
33Chapter 4 (commencing with Section 116270) including
34requirements for filtration.

35(3) Assist systems most in need on a per household basis
36according to affordability criteria.

37(b) The department may, in establishing a new priority list,
38merge those proposed projects from the existing priority list into
39the new priority list.

P4    1(c) In establishing the priority list, the department shall consider
2the system’s implementation of an ongoing source water protection
3program or wellhead protection program.

4(d) In establishing the priority list categories and the priority
5for funding projects, the department shall carry out the intent of
6the Legislature pursuant to subdivisions (e) to (h), inclusive, of
7Section 116760.10 and do all of the following:

8(1) Give priority to upgrade an existing system to meet drinking
9water standards. This includes an upgrade to an existing system
10to meet drinking water standards in a disadvantaged community
11that is distinct from the applicant agency.

12(2) After giving priority pursuant to paragraph (1), consider
13whether the applicant has sought other funds when providing
14funding for a project to upgrade an existing system and to
15accommodate a reasonable amount of growth.

16(e) Consideration of an applicant’s eligibility for funding shall
17initially be based on the priority list in effect at the time the
18application is received and the project’s ability to proceed. If a
19new priority list is established during the time the application is
20under consideration, but before the applicant receives a letter of
21commitment, the department may consider the applicant’s
22eligibility for funding based on either the old or new priority list.

23(f) The department may change the ranking of a specific project
24on the priority lists at any time following the publication of the
25list if information, that was not available at the time of the
26publication of the list, is provided that justifies the change in the
27ranking of the project.

28(g) The department shall provide one or more public hearings
29on the Intended Use Plan, the priority list, and the criteria for
30placing public water systems on the priority list. The department
31shall provide notice of the Intended Use Plan, criteria, and priority
32list not less than 30 days before the public hearing. The Intended
33Use Plan, criteria, and priority list shall not be subject to the
34 requirements of Chapter 3.5 (commencing with Section 11340) of
35Part 1 of Division 3 of Title 2 of the Government Code. The
36department shall conduct duly noticed public hearings and
37workshops around the state to encourage the involvement and
38active input of public and affected parties, including, but not limited
39to, water utilities, local government, public interest, environmental,
40and consumer groups, public health groups, land conservation
P5    1interests, health care providers, groups representing vulnerable
2populations, groups representing business and agricultural interests,
3and members of the general public, in the development and periodic
4updating of the Intended Use Plan and the priority list.

5(h) The requirements of this section do not constitute an
6adjudicatory proceeding as defined in Section 11405.20 of the
7Government Code and Section 11410.10 of the Government Code
8is not applicable.

9

SEC. 3.  

Section 116760.79 of the Health and Safety Code is
10amended to read:

11

116760.79.  

(a) Applications for funding under this chapter
12shall be made in the form and with the supporting material
13prescribed by the department.

14(b) The department shall establish a process by which multiple
15water systems may apply for funding as a single applicant for the
16purpose of consolidating water systems or extending services to
17households relying on private wells. Funding shall be available to
18these applicants if the following criteria are met:

19(1) At least one of the systems of private wells serves a
20disadvantaged community or a severely disadvantaged community
21that is in violation of Chapter 4 (commencing with Section
22116270).

23(2) Fifty percent of the project funds support, facilitate, or allow
24for planning and preliminary engineering studies, project design,
25or construction to consolidate with, or extend services to, existing
26water system facilities or private wells that are in violation of
27Chapter 4 (commencing with Section 116270).

28(3) The purpose of the consolidation or service extension
29includes providing safe and potable drinking water to a community,
30bringing one or more of the applying water systems into
31compliance with this chapter.

32

SEC. 4.  

Section 116760.90 of the Health and Safety Code is
33amended to read:

34

116760.90.  

(a) The department shall not approve an application
35for funding unless the department determines that the proposed
36study or project is necessary to enable the applicant to meet safe
37drinking water standards, and is consistent with an adopted
38countywide plan, if any. The department may refuse to fund a
39study or project if it determines that the purposes of this chapter
40may more economically and efficiently be met by means other
P6    1than the proposed study or project. The department shall not
2approve an application for funding a project with a primary purpose
3to supply or attract future growth. The department may limit
4funding to costs necessary to enable suppliers to meet primary
5drinking water standards, as defined in Chapter 4 (commencing
6with Section 116270).

7(b) With respect to applications for funding of project design
8and construction, the department shall also determine all of the
9following:

10(1) Upon completion of the project, the applicant and other
11beneficiaries of the project will be able to supply water that meets
12safe drinking water standards.

13(2) The project is cost effective.

14(3) If the entire project is not to be funded under this chapter,
15the department shall specify which costs are eligible for funding.

16(c) In considering an application for funding a project that meets
17all other requirements of this chapter and regulations, the
18department shall not be prejudiced by the applicant initiating the
19project prior to the department approving the application for
20funding. Preliminary project costs that are otherwise eligible for
21funding pursuant to the provisions of this chapter shall not be
22ineligible because the costs were incurred by the applicant prior
23to the department approving the application for funding.
24Construction costs that are otherwise eligible for funding pursuant
25to the provisions of this chapter shall not be ineligible because the
26costs were incurred after the approval of the application by the
27department but prior to the department entering into a contract
28with the applicant pursuant to Section 116761.50.

29

SEC. 5.  

Section 116761.20 of the Health and Safety Code is
30amended to read:

31

116761.20.  

(a)  Planning and preliminary engineering studies,
32project design, consolidation with or extension of services to an
33existing water system, and construction costs may be funded under
34this chapter by loans, or, in the case of public agencies or private
35not-for-profit water companies, by grants or a combination of
36grants and loans. Multiple water systems that apply under a single
37application, as provided in subdivision (b) of Section 116760.79,
38may be funded by grants, loans, or a combination thereof.

39(b)  The department shall determine what portion of the full
40costs the public agency or private not-for-profit water company is
P7    1capable of repaying and authorize funding in the form of a loan
2for that amount. The department shall authorize a grant only to the
3extent the department finds the public agency or not-for-profit
4water company is unable to repay the full costs of a loan.

5(c)  At the request of the department, the Public Utilities
6Commission shall submit comments concerning the ability of
7suppliers, subject to its jurisdiction, to finance the project from
8other sources and to repay the loan.

9begin insert

begin insertSEC. end insertbegin insert6.end insert  

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begin insertIf legislation enacted in 2013 transfers the statutory
10and regulatory authority for the implementation of the California
11Safe Drinking Water Act from the State Department of Public
12Health, this act shall not become operative until one year after the
13effective date of the transfer of authority.end insert



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